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Sanan Optoelectronics and STMicroelectronics to set up a joint venture in Chongqing to produce silicon carbide wafers

 On June 7, Sanan Optoelectronics, a leading China compound semiconductor company, and STMicroelectronics, the world's leading semiconductor company, jointly announced: The two parties have signed an agreement to jointly establish a new 8-inch silicon carbide device joint venture manufacturing facility in Chongqing, China.  At the same time, Sanan Optoelectronics will establish an 8-inch silicon carbide substrate factory as a supporting facility. 

 The joint venture project company will be held by Sanan Optoelectronics, tentatively named "Sanan STMicroelectronics (Chongqing) Co., Ltd.", of which Hunan Sanan, a wholly-owned subsidiary of Sanan Optoelectronics, holds 51% and STMicroelectronics (China) Investment Co., Ltd. holds 49%.  The project is expected to have a total investment of US $3.2 billion and will start construction after approval by the regulatory authorities. Production is planned to begin in the fourth quarter of 2025 and is expected to be fully completed in 2028. It will adopt ST's patented silicon carbide manufacturing process technology and can produce 10,000 8-inch silicon carbide wafers per week after reaching production capacity.  The 8-inch silicon carbide substrate factory wholly owned by Sanan Optoelectronics in Chongqing is planned to invest about RMB 7 billion yuan. It will be established and operated separately with its own silicon carbide substrate process to meet the substrate demand of the joint venture factory and sign a long-term supply agreement with it. 

 Lin Kechuang, general manager of Sanan Optoelectronics, said: "The establishment of this joint venture factory will inject new strength into the China silicon carbide market, and we will give full play to our respective advantages, expand production capacity supply, and vigorously promote the wide application of silicon carbide devices in the market and boost the rapid development of the new energy automobile industry."  This also shows that Sanan Optoelectronics 'silicon carbide business has been fully recognized by international customers, which is an important step towards our goal of becoming an international professional silicon carbide foundry.  With the establishment of new joint venture factories and substrate factories, we are confident that we will continue to dominate the silicon carbide foundry market.” 

 Jean-Marc Chery, President and CEO of STMicroelectronics, said: "China's automotive and industrial sectors are moving at full speed towards electrification, and for ST, building a dedicated fab with a key local partner in China will help us meet the growing needs of our Chinese customers in the most efficient way."  By combining San 'an Optoelectronics' future 8-inch substrate manufacturing facility, our new front-end joint venture manufacturing facility, and STMicroelectronics 'existing back-end manufacturing facility in Shenzhen, we will be able to provide a fully vertically integrated SiC value chain for China customers.  This is also an important step in our further expansion of our global silicon carbide manufacturing business, in addition to our continued significant investments in Italy and Singapore.” 

 At present, silicon carbide track is very hot, new energy vehicle is one of the main application markets of silicon carbide, but also the core growth engine of the industry in recent years.  Silicon carbide material has the advantages of high pressure resistance, high temperature resistance, high frequency, etc. Silicon carbide power devices are widely used in a wide range of applications, which can improve the charging efficiency of new energy vehicles, realize longer cruising range with the same electric quantity, improve the driving performance of the whole vehicle, and solve the double anxiety of "slow charging" and "short mileage".  According to Yole data, the global silicon carbide power device market is expected to grow from USD 1.09 billion in 2021 to USD 6.297 billion in 2027, with an average annual compound growth rate of 34%.  The cooperation between the two silicon carbide industry giants has attracted much attention from the industry and the market. 

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